The Star Entertainment Group has welcomed Steve McCann as its new Managing Director and CEO, effective from 2 December 2024, following comprehensive regulatory approval. McCann’s leadership transition follows Neale O’Connell, who will shift from Acting Group CEO to continue as Interim Group CFO until the appointment of a permanent CFO.
Leadership transition at The Star Entertainment Group:
Previously integral to Crown Resorts’ recovery strategy prior to its acquisition by Blackstone, McCann now takes the reins at The Star amid significant operational and financial hurdles. According to Inside Asian Gaming, his involvement has already been notable, spearheading recent capital-raising activities and negotiating a new AUD100 million debt facility, with the possibility of an additional AUD100 million upon achieving certain milestones.
The Star is currently addressing serious financial challenges, primarily stemming from compliance lapses highlighted in the Bell Two inquiry. These issues have led to a substantial AUD15 million fine, a looming casino license suspension, and significant stock value depreciation.
As reported by SIGMA World, at the recent Annual General Meeting, Anne Ward, Chairman of The Star, underscored the critical importance of liquidity and financial health as the company’s utmost priorities. While a newly revised lending agreement has provided temporary relief, Ward emphasized the necessity for continued efforts to stabilize and enhance the company’s operations and compliance measures throughout 2025.
The implementation of a new AUD200 million debt facility is part of broader efforts to regain financial stability. Yet, the recovery trajectory will largely depend on The Star’s ability to rectify compliance deficiencies and rebuild trust in the marketplace amid ongoing regulatory examinations and revenue declines.
Comprehensive remediation and recovery efforts:
Under McCann’s guidance, The Star has laid out an elaborate remediation plan aimed at reinstating its regulatory standing and social license. This plan, sanctioned by Queensland regulators, comprises 14 detailed workstreams targeting various areas such as cultural reform, safer gambling practices, compliance enhancement, financial crime prevention, governance restructuring, and technological advancements. The goal is to achieve significant progress by March 2025.
McCann has expressed the company’s firm commitment to overhauling its corporate culture and mending relationships with regulatory bodies. However, he also noted the financial burdens associated with these transformation efforts, including elevated costs for external consultancy and advisory services.
Despite some initial progress, The Star continues to face daunting financial results. Trading of its shares on the Australian Stock Exchange resumed in September following a temporary halt, yet the company’s financial performance at the EBITDA level remains underwhelming.
In his new role, McCann is prioritizing the execution of the remediation plan alongside efforts to restore credibility with regulators and stakeholders. His leadership is crucial as The Star navigates the complex landscape of compliance, operational restructuring, and financial recovery in the upcoming months.
